The price of Monero has plummeted, causing concerns in the market. XMR dropped by about 20% in one day, temporarily falling below $500.
Short-term traders panicked due to this sharp movement. However, based on the current data, this decline is considered not a trend reversal but a reset of the correction.
Monero, concerns about additional selling recede
Despite a large sell-off, XMR holders have not collectively withdrawn. According to on-chain data, selling pressure remains modest. The Money Flow Index (MFI) has decreased, and the buying momentum is slowing, but it is still above the neutral line of 50. It is difficult to say that bears have taken control in this situation.
Since the MFI combines price and trading volume, remaining in the positive zone indicates that demand still exceeds supply. In the case of XMR, this means a breather after a rise, not structural weakness. Holders are maintaining discipline and preventing sharp declines.
Derivative data also supplements the overall picture. Open interest has decreased by 20.8% over the past 48 hours, dropping from $624 million to $494 million. While it appears bearish, it is believed to be a result of over-leveraged long positions being liquidated.
Furthermore, it is important that XMR's funding rate has remained positive even in a declining phase. Long positions are still dominant, and traders are paying costs to maintain positions, expecting an upward phase. This trend suggests that the market prioritizes stability and recovery over continued decline.
Technical analysis of tokens and the latest market information: If you would like more detailed insights, please subscribe to the newsletter delivered daily by editor Harsh Notaliya.
Analyst Matthew Highland points out the 10-year ascending triangle pattern of XMR. It has consistently maintained the ascending diagonal support from the 2016-2017 cycle, raising lows and maintaining a long-term bullish structure.
The main horizontal support is positioned in the $400-$500 range, where prices have stagnated in the past. Currently, XMR is returning to this level, and amidst increasing selling pressure, it may become the starting point for long-term increases.
"In my view, the range will be $10,000 to $125,000 over the next 5 to 20 years," Matthew states regarding XMR's long-term outlook.
If the XMR price can maintain and rebound from this zone, continued bullishness will be supported. On the other hand, if it clearly drops below this level, there may be prolonged consolidation or adjustments down to the rising trend line in the $200-$300 range.
Is the XMR price recovery the next development?
As of the time of writing, Monero has fallen about 20% in a day, trading around $499. The recent sell-off has pushed the price below the 23.6% Fibonacci retracement level. This level is considered the bottom of a bear market, and while caution is needed due to the breach, the overall context is important.
If it can early recover and maintain $500, many downside risks will be alleviated. Given that there is no rush to sell and long positions are in control, the possibility of a rebound is high. If buying returns, XMR could rise to around $560, and if momentum continues, $600 will be within range.
If sentiment changes rapidly, the bullish scenario will break. As profit-taking intensifies, pressure on the XMR price will increase, and in that case, the next important support will be $450. If this level is lost, the recovery scenario will be denied, leading to further adjustment around $417.
